The Libyan government has released state funding to the tune of $1.06 billion to the National Oil Corporation that NOC will use to maintain oil production in the current year, Reuters reports, citing a government statement.
Last week, NOC’s chairman, Mustafa Sanalla, warned Libya’s oil production could drop steeply during financial 2019-2020 unless the Government of National Accord, which is internationally recognized provided the funds it had agreed to allocate for NOC’s needs.
“If the corporation’s allocations are not released without delay, Libyan oil production will be hundreds of thousands of barrels per day lower than it should be. That will have an extremely negative effect on national income,” Sanalla said.
The chairman also slammed the government for reducing NOC’s approved budget including the budgets for its subsidiaries twice since the start of the year.
This is not the first time the National Oil Corporation has complained about how the government is handling its vital oil industry. In fact, complains about inadequate funding have been frequent since the Government of National Accord was formed after the official end of the civil war that started in 2011 with the ousting of Muammar Gadhafi.
Now, the bulk of the funds the GNA has released will be used “for projects that contribute in maintenance of current production rates and increase the productive capacity of the oil and gas sector.” The rest will be used to pay NOC debts to other companies.
Libya produces about 1.3 million bpd of crude oil currently, but NOC has plans to boost this considerably. The chances of this boost taking place are anyone’s guess given the still unstable political situation in the North African country. The danger of field and pipeline outages is still very real although NOC has become good at quickly restoring production after an outage.